The secretary says it's a 'reset,' but critics say the fox is guarding the hen house

Education Secretary Betsy DeVos has ordered a "regulatory reset" of rules intended to protect students from predatory for-profit colleges. But critics say the reset puts the interests of for-profit colleges ahead of those of students.

"The message the Trump Administration is sending our students is coming into focus: look out, the fox is guarding the henhouse,” said California Attorney General Xavier Becerra. But Becerra said he was not surprised by the action.

With the founder of Trump University in the White House, for-profit education is riding high once again. After years of increasing federal oversight, the for-profit college industry sees President Trump's regulation rollback as its ticket to renewed growth.

The Education Department last week announced it would delay enforcing the "gainful employment" rules drafted by the Obama Administration to crack down on schools that leave their students with huge debts and scant job...

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The actual stated requirements might prove impossible for most students to meet

06/09/2015 | ConsumerAffairs

By Jennifer Abel

Yesterday the Department of Education (DoE) made the surprise announcement that it would offer “Debt relief for Corinthian Colleges students,” as part of an attempt “to ensure Americans are protected from unscrupulous colleges that deny students meaningful educational opportunities and leave taxpayers holding the bag.”

Yet critics call the DoE's plan “a process that re-victimizes students as a solution to a problem they [the DoE] created.”

The board of the publicly traded company has voted to sell itself to private investors

Apollo Education Group operates University of Phoenix, one of the nation's largest for-profit colleges. After months of declining stock price and heightened government scrutiny – not to mention competition – the company has announced some major changes.

For starters, Apollo has announced it will take itself private, meaning its shares will no longer be sold on the stock market. Instead, the company is being acquired by a consortium of private investors, led by The Vistri...

Agency gave for-profit college the approval it needed to hand out federal education funds

For more than two years Corinthian College has been the poster-child for the problems plaguing higher education, particularly among for-profit colleges and universities.

One year ago the Consumer Financial Protection Bureau (CFPB) sued Corinthian Colleges, Inc. for what it called an illegal predatory lending scheme. The suit claimed Corinthian lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects...

Students and their families don't have as much time as they think

The new year is more than just a flip of the calendar. For families preparing to send a child off to college it's a time for shopping for financial aid – an increasingly critical factor in being able to afford higher education.

January 1 was the first day families could start filing their FAFSA forms, the financial aid forms the U.S. Department of Education uses to calculate and distribute more than $150 billion in grants, loans and work-study funds each year.

The Estimated Family Contribution number from the government is often inaccurate

Selecting a college really is a little like buying a car. There's the sticker price, but that really isn't what the car – or the college – costs.

When looking at a particular college, the sticker price is the cost of tuition. But that cost can be offset to some degree by financial aid. What the student ends up paying can be very different from the sticker price.

The government is trying to help by assigning applicants an Estimated Family Contribution (EFC) amou...

For-profit schools have been feeling the heat of stepped-up oversight following several failures

For-profit colleges are barred from receiving more than 90% of their revenue from federal financial aid, but following the collapse of ITT, Corinthian, and other for-profit chains, DeVry says it will accept no more than 85% of its revenue from the feds.

“This is a significant pledge that DeVry Group is voluntarily making for the long term and it underscores our commitment to finding solutions to the issues facing higher education today,” said Lisa Wardell, president and ...

The Department of Education's current complex debt-relief program is essentially useless

08/21/2015 | ConsumerAffairs

By Jennifer Abel

The attorneys general of 11 different states are urging the Department of Education to discharge the federal student loan debts of students whose for-profit schools were shut down for violating various laws – especially victims of schools that operated as part of the now-defunct Corinthian Colleges chain.

Yesterday, presumably in response to the DoE's stated intention of establishing a “clearer, more comprehensive” debt forgiveness program for defrauded students, Illinoi...

It could cut deeply into rising student loan debt while posing issues for other colleges

President Obama has proposed taking state and local initiatives providing free community college for 2 years and making them a national program.

The proposal, unveiled in a speech in Knoxville, Tenn., last week, has a $60 billion price tag. And in his speech Obama made clear he views this as much as an economic initiative as an educational one.

“For millions of Americans, community colleges are essential pathways to the middle class because they’re local, they...

The 18 AGs plead with Education Secretary DeVos and Congress not to roll back for-profit regulations

A group of state attorneys general are asking Education Secretary Betsy DeVos and Congressional leaders not to declare "open season" on students by rolling back regulations governing for-profit colleges.

"Over the past fifteen years, millions of students have been defrauded by unscrupulous for-profit post-secondary schools," said the nine-page letter signed by 18 attorneys general, who said they had been forced to step in to stop some of the worst abuses because accredit...

Will look for predatory practices before they ensnare students

The problems students have had with some for-profit school are well documented. Remember Corinthian College?

You don't have to have a long memory. In September 2014 the U.S. government sued the for-profit college for what it called an illegal predatory lending scheme.

The Consumer Financial Protection Bureau (CFPB) charged that Corinthian lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects and career services. To make matters worse, CFPB said Corinthian then used illegal debt collection tactics to strong-arm students into paying back those loans while still in school.

Before it declared bankruptcy and closed less than a year later, thousands of students had borrowed huge sums to attend, with nothing to show for it.

Proactive move

Now, the Department of Education wants to make sure potential train wrecks like Corinthian cross its radar screen before consumers have been harmed. It has announced creation of a Student Aid Enforcement Unit to respond more quickly and efficiently at the first suggestions of trouble.

"When Americans invest their time, money and effort to gain new skills, they have a right to expect they'll actually get an education that leads to a better life for them and their families," Acting Secretary of Education John B. King Jr. said in a release. "When that doesn't happen we all pay the price. So let me be clear: schools looking to cheat students and taxpayers will be held accountable."

To head up the unit, Robert Kaye is coming over from the Federal Trade Commission (FTC), where he was a top enforcement attorney.

Four divisions

The new unit will have four divisions that will perform special roles. The Investigations Group will be the early warning system, on the lookout for potential misconduct or high-risk activity among higher education institutions so that it can protect federal funding.

The Borrower Defense Group will provide legal support, It will analyze claims and make injury determinations.

The Administrative Actions And Appeals Service Group will impose administrative actions, such as suspending an institution and levying a fine. It will also try to resolve appeals by program participants.

The problems students have had with some for-profit school are well documented. Remember Corinthian College?

You don't have to have a long memory. In September 2014 the U.S. government sued the for-profit college for what it called an illegal predatory lending scheme.

The Consumer Financial Protection Bureau (CFPB) charged that Corinthian lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects and ...

A Half Century Of Tuition Inflation Adds Up

When gasoline prices surged in the wake of Hurricane Katrina, many angry consumers believed Big Oil was engaging in price gouging. But as the costs of a college education have skyrocketed, few have accused Big Education of doing a little gouging of its own.

But are colleges overcharging students and parents? And if not, then why is a college education today so expensive that many can't afford it and others can do so only by racking up substantial debt?

While businesses are structured to keep costs as low as possible, Ehrenberg maintains that colleges today operate on a starkly different model. They actually have an incentive to spend money.

"In private higher education, the quest is to be as good as you can," Ehrenberg told ConsumerAffairs.com. "Tuition increases in private higher education reflect increased expenditures per student, in real terms."

Public colleges and universities are raising their tuition as well, he says, because of reduced support from state governments. But there's also the supply and demand factor.

Story contines below video

The Spending Race

In his book, Ehrenberg concedes that as long as there are plenty of qualified applicants, no institution is going to end the spending race. And when tuition rises at one institution, others are more likely to raise prices as well.

Naroff, who taught economics at the University of Massachusetts and Northeastern University, says that for elite colleges, raising their tuition doesn't necessarily discourage applicants; in fact, it can increase an institution's perceived desirability.

"There is very little pressure of any kind to keep costs down at private schools," Naroff said. "For most of the private schools, especially the better and elite schools, the more expensive it is, the more elite it is, and the more having a degree from that school is a perceived value."

These days, all universities -- public and private -- are directing some of that spending to a bidding war for faculty members with reputations. As a result, salaries and perks for college professors have risen dramatically.

The bidding war also extends to students, with colleges erecting plush dorms, state-of-the-art health clubs, gourmet restaurants and other amenities, all designed to lure the brightest and most talented students, who desire creature comforts as well as a challenging education.

State universities that once had an open enrollment policy -- admitting any high school graduate in the state -- now screen entry using standardized tests, grade-point averages, and other factors to limit enrollment to a more elite group. However, they are finding they must compete harder to get those students.

Competition Raises Costs

As a result, colleges spend more money making their institutions attractive, and charge more to attend them. Normally, competition drives prices down but apparently not in academe.

Naroff makes an analogy to professional sports.

Forty years ago, players in the National Football League were poorly paid. They played in baseball stadiums and it cost very little for fans to attend games. Now, teams pay their players millions of dollars and the average fan might spend $200 for an outing at the team's multi-million dollar stadium.

"Basically, if you can pass on your costs, you don't care what your costs are," Naroff said.

Today, tuition at state universities is around $12,000 a year and $25,000 and up at private schools, but it may surprise some to learn that rapidly rising college tuition is not a new phenomenon. In fact, figures compiled by the College Board show that college tuition has risen at about twice the general inflation rate since 1958, when statistics first began to be tracked.

The rate of increase has been sharply higher in some years than others. For example, in 1964, when the first Baby Boomers headed off to college, tuition inflation rose 4.61 percent, which was more than four times faster than the overall inflation rate. Between the years 1980 and 1982, when raging inflation in the economy increased a total of 30 percent, tuition costs surged by 40.3 percent, and have been steadily rising ever since.

Increases in tuition since 1992 have been steady, but comparatively tame, never rising above six percent, as the overall inflation rate has hovered around 2.5 to 3.0 percent.

But all those yearly increases have taken a toll.

In 43 of the last 49 years, college tuition inflation has exceeded the nation's inflation rate, with the cumulative increase pushing the costs beyond many students' ability to pay.

Financial Aid to the Rescue?

As the cost of attending college has risen, so has the availability of student financial aid. Students and parents who can't afford the yearly cost of tuition, room and board, and books can apply for scholarships, grants and loans to make up the difference.

By the College Board's accounting, there was $105 billion in financial aid flowing into higher education in the 2002-2003 school year. Has all that money inadvertently fed tuition inflation?

"There is very little evidence that this has occurred," Ehrenberg said.

Where does the financial aid come from? There are a variety of sources, but at many schools, scholarship and grant money comes directly from the schools themselves, paid for through endowments and, to a large degree, by the ever-rising tuition paid by other students.

And how is that aid distributed? Highly prized and recruited students are most likely to receive the scholarships and grants. Everyone else must take out student loans.

A 2003-2004 study by the National Center for Education Statistics found that more than 65 percent of students borrow at least some money to pay for education, with the average student graduating with more than $17,000 of debt. Many graduate with an even heavier debt load.

Rudy Arndt, a retired high school guidance counselor in the Toms River, New Jersey School District, witnessed the rising costs of college over the span of his career.

He said he first began to see high school seniors looking for college loans in the mid 1970s. By the time he retired in 1992, he saw students taking on dangerous amounts of debt to pay for their schooling.

"We've got to warn students not to get so overloaded with debt that it will affect their ability to live once they graduate," he said.

Ehrenberg shares that concern, and thinks it might unduly influence a student's choice of career.

"I am very much concerned and worry especially that it may preclude students from entering socially important but low-paying occupations," Ehrenberg said.

"Just as law schools have loan forgiveness programs to encourage law students to go into public interest law, states should consider loan forgiveness programs for public higher education graduates who enter socially important occupations," he suggested.

Buyer's Remorse

While many students graduating with $100,000 or more of debt often express "buyers' remorse," it's clear not all do.

"Craig," a 2005 graduate of an elite northeastern university who works in Washington, DC, pays $700 a month on his student loans, but has no regrets.

"I received an excellent education for a reasonable price," he told ConsumerAffairs.com.

He suggests high school seniors begin discussions with guidance counselors early about their financial needs, and focus on schools that offer what they want but that are also willing to offer the students financial incentives to attend.

"With good colleges it's a two-way street. Not only do you want to go there, but if you have the grades, potential, desire and experiences, they want you and will make monetary sacrifices to enroll you," he said.

Congress Gets Involved

The level of student debt has become such a sensitive issue that Congress has taken action to cut the rates on federally-guaranteed student loans. In New York, Attorney General Andrew Cuomo recently launched an investigation into charges some colleges have steered students to certain lenders in return for favors.

"My office is seeking to ensure that students are being steered toward lenders offering the most competitive rates, not those who offer the best perks to schools or financial aid administrators," said Cuomo.

Cuomo is looking into allegations that some lenders have offered trips and gifts to higher education officials with whom they do business. Cuomo says when people across the country are struggling to keep up with the cost of tuition, that behavior can't be tolerated.

Meanwhile, the news about college tuition is not all bad. Since 1996 a number of private schools have actually cut tuition -- some by steep amounts.

According to the National Association of Independent Colleges and Universities, Lourdes College in Sylvania, Ohio cut tuition 41 percent; North Park University in Chicago cut tuition 32 percent. For a complete list, see www.naicu.edu/news/TuitionCuts.htm.

States are also investing greater amounts in their community college systems, which by and large maintain open enrollment policies and cost considerably less than four year schools. In many states, a student earning a two year associates degree at a community college may transfer as a junior to most public universities to receive their bachelor's degree.

"I think the community college system has been under-funded and under-valued," Naroff said. "It has helped millions of people earn a college degree and I think it should play an even greater role in education."

Typically, their tuition is more -- often much more -- than community colleges but comparable to public universities and less than most private colleges. They don't need plush campuses because most of their students spend their non-school hours at a job.

Derided by many in traditional academia and often the source of bitter complaints by students, these colleges nonetheless have appealed to low-income, minority, and working students and adults in ways traditional colleges haven't, by offering courses in the evening and on weekends and pioneering the use of online and distance learning.

David Kird, professor of public policy at the University of California at Berkeley, acknowledges for-profit schools have their limitations. But he stunned a 2005 conference on higher education when he praised work being done by DeVry, noting that it "graduates more African-American engineers than any other institution in the United States."

But criticism of the for-profit schools, particulary University of Phoenix is mounting. Former students and the school's own staff and faculty complain that the relentless quest for profits has hurt the quality of the education that students receive, the New York Times reported in a front-page story today. The school has only regional accredition.

Prospective college students and their families would do well to consider community colleges and less expensive state schools rather than mortgaging their future to attend a supposedly more prestigious institution.

While a for-profit school may be the answer in some cases, students should investigate thoroughly to be sure they know what they'll be getting for their money. Check the ConsumerAffairs.com complaints about the University of Phoenix and DeVry University before plunking down money or taking out a loan. Chances are, a community college would be cheaper and would offer a better education for most students.

But are colleges overcharging students and parents? And if not, then why is a college education today so expensive that many can't afford it and others can do so only by racking up substantial debt?

Ronald Ehrenberg, Professor of Economics at Cornell University and author of "Tuition Rising: Why College Costs So Much" says there are rational economic reasons for tuition's constant creep upwards.

While businesses are structured to keep costs as low as possible, Ehrenberg...

More colleges are allowing a faster path to a degree

For a generation the cost of a college education has been rising much faster than the rate of inflation.

As a result, student loan balances are getting bigger and bigger, to the point that the total amount owed on student loans in the U.S. is well over $1 trillion. The search is on for a solution to out of control spending on higher education.

One possible solution might be speed. Instead of spending 4 or 5 years earning a bachelor's degree, running up thousands of dollars in debt each year, what if you could get that degree in a shorter period of time – maybe 18 months?

Sounds too good to be true, and you know what they say about things that sound like that. But a lot of serious people are giving this idea serious consideration.

In a speech on education President Obama said some colleges are already embracing new ways to provide education for less money.

Presidential example

“Southern New Hampshire University gives course credit based on how well the students master the material, not just on how many hours they spend in the classroom,” Obama said. “If you're learning the material faster you can finish faster, which means you pay less.”

Since Obama's speech a number of schools have begun offering accelerated undergraduate and graduate degree programs that can be taken online. And more of a student's previous work may count toward the degree.

In these accelerated program, schools are being more liberal about accepting credit from another school or educational program. That, in itself, can get them closer to their degree in a shorter period of time.

Credit where credit is due

Accelerate Degree, a Charlottesville, Va.-based organization, says if students bring something to the table before applying to a program – whether it be previous credit, work experience, or another way to receive transfer credit – they will likely find that any level degree can be completed in as little as one year.

While it may be difficult to finish a bachelor's degree in one year, there are a number of graduate degrees that may be obtained in that time.

Fast Track Program

Northeastern University, in Boston, calls it the “Fast Track Program.” It offers accelerated learning in select programs, allowing students to transfer credits and complete their undergraduate degree in 18 months.

Bellevue University, a private non-profit college in Nebraska, offers an accelerated bachelor's degree to students who have an associate's degree or close to 60 college credit hours. The school says students can complete their degrees in as little as 16 months.

“If you have fewer than 60 credits, we have many ways to earn credit beyond the classroom, including credit for training on the job or in the military,” the school advises.

Not right for everyone

An accelerated degree program is obviously aimed at adults who have completed some college but are now in the working world. In their present form these programs may be less suitable for incoming freshmen with no credits.

Beyond that, these programs might not work for everyone. It will take someone with a lot of discipline and willingness to put in the intense work to reach their goals.

That isn't exactly a description of today's college student. A 2011 survey found that most students at traditional colleges are taking longer to graduate – only 40% were completing the work within the traditional 4 years.

For a generation the cost of a college education has been rising much faster than the rate of inflation.

As a result, student loan balances are getting bigger and bigger, to the point that the total amount owed on student loans in the U.S. is well over $1 trillion. The search is on for a solution to out of control spending on higher education.

One possible solution might be speed. Instead of spending 4 or 5 years earning a bachelor's degree, running up thousands of dollar...

Department of Education urged to investigate ITT Educational Services

Are we looking at a repeat of the Corinthian Colleges debacle?

05/15/2015 | ConsumerAffairs

By Jennifer Abel

After the downfall of Corinthian Colleges, which declared bankruptcy earlier this month following years of legal troubles which included federal agencies ranging from the Department of Education (DoE) to the Consumer Financial Protection Bureau (CFPB), plus the attorneys general of several different states, all alleging that Corinthian-owned schools defrauded students in various ways, lawmakers and other public officials have turned a sharper eye to other for-profit schools dependent upon a steady stream of federally backed, bankruptcy-proof student loans to stay in business.

Today, Congresswoman Jackie Speier (D-California) released an open letter to Education Secretary Arne Duncan urging the DoE to “conduct an investigation of and exercise increased oversight over the for-profit college operator ITT Educational Services, Inc.,” which has allegedly “engaged in deceptive and predatory lending practices, pushing students into high-interest loans they know cannot be repaid, at vast taxpayer expense.”

Speier's letter, available in .pdf form here, includes a list of complaints which sound depressingly familiar to anyone who knows Corinthian's story.

Predatory lending

Last year, for example, the feds sued Corinthian for “predatory lending practices,” and Speier's letter mentions similar practices from ITT: “The Securities and Exchange Commission (SEC) filed charges on May 12, 2015 alleging that that [sic] the CEO and CFO of ITT Educational Services covered up balloning loan obligations stemming from the company's …. predatory lending programs.”

Last November, a former ITT student in Pennsylvania wrote us to say “I was one of those students who signed for a private loan in order to continue my education. Unaware of the lies and deceit that was going on within the company. The program of study was electronics.... I was assured that upon graduation I would have a career, not a job.”

But after graduating in 2011, she discovered her degree was useless: “I am a temporary employee. My credit is shot and I make a little above minimum wage. I have gone on numerous interviews just to be laughed at and questioned about why ITT. … I am over $50,000 in debt because I believed I was getting a good education that would lead to a good future.”

And remember: that debt, like almost all student-loan debt, can't even be discharged in bankruptcy. But a former student who goes over his head in debt to attend a traditional, accredited state college or university at least has an authentic college degree (or credits to count toward one) to show for that outrageous debt load. ITT students say they don't even get that.

Good grades but ...

Mike from Oregon told us in January: “I went to ITT and I finally graduated with really good grades, 3.8 … in 1994.” A few years later, Mike wanted to enroll in a regular four-year school to earn a bachelor's degree, but learned that no reputable school would “transfer any credits at all from ITT, so I had to start over from scratch …. since it is not an accredited school if you ever plan to further your education and want to transfer to a real college you are much better off going to a real college from the start.”

Still, Mike says, his degree from ITT isn't completely useless: “you can hang it on the wall to cover up a hole or you can use it to cover a stain.”

Jay in Massachusetts made a similar observation from a different perspective. He spent one academic year – September 2013 through the following June – teaching at an ITT “Electronic Technology School.”

"Rot-gut shameless"

I have been a PhD electrical engineer for 25 years, mostly in the defense sector. But have never worked for such a rot-gut shameless enterprise, not even close. You need to understand [the] whole enterprise, ITT I mean, is a colossal nationwide profiteering scam. There are so many problems with ITT, I hardly know where to begin …. Recruiters routinely tell students that ITT courses will transfer should a student decide to complete a conventional 4-year program at another school after, say, completing an associates degree program at ITT. This is false. Credits will transfer to another ITT school (or possibly to another for-profit school like ITT) - that much is true - but not to an accredited state university.

In her letter to Education Secretary Duncan, Rep. Speier alludes to such complaints, and previous problems with the now-defunct Conrinthian schools, when she says:

The Department of Education has conducted increased oversight and exercised enforcement options in the past, as it did with the Corinthian Colleges [but] those investigations have been plagued with delays. In fact, Corinthian Colleges, Inc. was investigated by the SEC in June 2013 – a full year before ED opened their own June 2014 investigation …. This delay harmed students who continued to take loans on a worthless education, and taxpayers who footed the bill. I ask that in this case you take action quickly and responsibly.

After the downfall of Corinthian Colleges, which declared bankruptcy earlier this month following years of legal troubles which included federal agencies ranging from the Department of Education (DoE) to the Consumer Financial Protection Bureau (CFPB), plus the attorneys general of several different states, all alleging that Corinthian-owned schools defrauded students in various ways, lawmakers and other public officials have turned a sharper eye to other for-profit sch...

Heald Colleges ordered to stop enrolling new students

04/15/2015 | ConsumerAffairs

By Jennifer Abel

The Department of Education has levied a $30 million fine against Corinthian Colleges, Inc. after an investigation “confirmed cases” that the company misrepresented the schools' job placement rates to current and prospective students of Corinthian-owned Heald Colleges.

The DoE agreement also forbids Heald from enrolling any more students, and requires the school to help current students either complete their education or continue it elsewhere.

According to the DoE, Corinthian's deceptive practices include paying temporary employment agencies to hire graduates for on-campus jobs lasting as little as two days, so that Heald could then count those students as having found work in their field after graduation.

Nothing new

Such allegations against the company are nothing new. The DoE's fine is merely the latest in a series of legal actions taken against the embattled chain of for-profit colleges.

Last September, when the Consumer Financial Protection Bureau sued Corinthian for predatory lending, the charges included allegations that the company would pay temp agencies to hire Corinthian grads to inflate the schools' placement rates, and also that the company promised good “career” options to graduates of Corinthian-owned Everest, WyoTech or Heald schools, yet Corinthian counted as a “career” any job lasting only one day, so long as there was the possibility of a second day of work.

In February, Corinthian students who'd taken out “Genesis” private loans got a collective $480 million in debt relief, resulting in debt reductions of up to 40 percent.

The schools' reputation among some groups is so unsavory that earlier this month, the attorneys general of nine states urged the federal government to forgive the federal debt burdens incurred by students holding the overpriced and worthless degrees.

And this week, when the Department of Education announced the $30 million fine against Corinthian, Education Secretary Arne Duncan said in a statement that “This should be a wake-up call for consumers across the country about the abuses that can exist within the for-profit college sector. We will continue to hold the career college industry accountable and demand reform for the good of students and taxpayers. And we will need Congress to join us in that effort.”

"Violent students' and taxpayers' trust"

The DoE's investigation found that Corinthian had badly mislead potential and current students of Heald Colleges, to the point where the students might not have enrolled in that school at all, had they known the truth.

U.S. Undersecretary of Education Ted Mitchell said in a statement, “Instead of providing clear and accurate information to help students choose which college to attend, Corinthian violated students' and taxpayers' trust. Their substantial misrepresentations evidence a blatant disregard not just for professional standards, but for students' futures.”

Among other things, the Department's investigation found that Heald paid companies to hire graduates for temporary positions lasting as little as two days, performing such basic tasks as moving computers and organizing cables, then counted those graduates as “placed in field.” Heald also counted obvious out-of-field jobs as in-field placements, including one graduate of an accounting program whose food-service job at Taco Bell was counted as “in-field” work.

In addition, the DoE said, “Heald College failed to disclose that it counted as 'placed' those graduates whose employment began prior to graduation, and in some cases even prior to the graduate's attendance at Heald.”

Like that Accounting graduate working at Taco Bell: she graduated from Heald in 2011 but had started at Taco Bell five years earlier, in June 2006.

A Corinthian spokesperson said in a statement that the Department of Education's conclusions were “highly questionable” and “unfounded,” and that “These unfounded, punitive actions do nothing to advance quality education … but would certainly shatter the dreams and aspirations of Heald students and the careers of its employees.” The spokesperson also said that Corinthian plans to appeal.

The Department of Education has levied a $30 million fine against Corinthian Colleges, Inc. after an investigation “confirmed cases” that the company misrepresented the schools' job placement rates to current and prospective students of Corinthian-owned Heald Colleges.

The DoE agreement also forbids Heald from enrolling any more students, and requires the school to help current students either complete their education or continue it elsewhere.

The action follows the feds' decision to shut off the flow of federal funds to ITT

California has ordered ITT to stop enrolling new students. The order came Friday, just one day after the U.S. Department of Education banned ITT from enrolling new students using federal financial aid funds in certain locations. It also vowed to increase its financial oversight of the chain of for-profit schools.

“The federal action raises grave concerns about the continued financial viability of ITT,” said Joanne Wenzel, chief of the state Department of Consumer Affairs Bureau for Private Postsecond Education (BPPE). “We took today’s action in the interest of protecting potential students who are considering enrolling in ITT.”

The order becomes effective Sept. 1 and affects all 15 ITT locations in California.

BPPE said it will file an accusation on the charges and allegations set forth in the emergency order within 10 days. The accusation will seek to revoke ITT’s approval to operate in California.

Students who have questions or need additional information can call BPPE toll-free at (888) 370-7589 or visit the bureau’s website.

The U.S. Department of Education said it took the action after ITT's accrediting agency found that the institution was not in compliance with accrediting criteria and was unlikely to be able to correct its deficiencies.

“Our responsibility is first and foremost to protect students and taxpayers,” said Education Secretary John B. King Jr. in a statement. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that it simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal student aid funds.”

California has ordered ITT to stop enrolling new students. The order came Friday, just one day after the U.S. Department of Education banned ITT from enrolling new students using federal financial aid funds in certain locations. It also vowed to increase its financial oversight of the chain of for-profit schools.

“The federal action raises grave concerns about the continued financial viability of ITT,” said Joanne Wenzel, chief of the state Department of Consumer Affairs...

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